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Introduction to Indian
Garment Industry
By ANKUR MAKHIJA –NITRA, Ghaziabad
APPAREL INDUSTRY-an
overview
• The Indian textiles industry plays an important role in the
country’s economic growth
• It contributes around 14% to industrial production, 4% to GDP
and 17% to the country’s export earnings
• One of the key trends seen in the liberalised post-quota
period is that India emerged a major sourcing destination for
new players.
• The industry’s size is estimated at US$ 55 bn with 64%
companies catering to domestic demand. The textiles industry
provides direct employment to more than 35 mn people and
indirect employment to 47 mn.
Apparel clusters in India
• The apparel industry is concentrated mainly in eight clusters:
• Tirupur,
• Ludhiana
• Bengaluru
• Delhi/Noida/Gurgao
• Mumbai
• Kolkata
• Jaipur
• Indore.
While Tirupur, Ludhiana and Kolkata are major centres for
knitwear, Bengaluru, Delhi/Noida/Gurgaon, Mumbai,
Jaipur and Indore are major hubs for woven garments.
Export Scenario
• India’s share in global T&C trade: 4% in textiles and 2.8% in
clothing
• India’s rank in world trade: 7th in textiles and 6th in clothing
• Share in the country’s total exports basket: 12%
• Readymade garments share: nearly 50% of total textile
exports
• India’s textiles products are exported to over 100 countries
• Two-third of India’s textiles are exported to the US and EU
• Other major export destinations include Canada, UAE, Japan,
Saudi Arabia, Republic of Korea, Bangladesh and Turkey.
Major Apparel Segments
SWOT ANALYSIS OF INDIAN GARMENT
INDUSTRY
Strength of Indian Garment
Industry
• Abundant raw material availability
India is one of the leading producers of natural and man made fibers.
The abundance of raw material allows industry to control cost and
reduce over all lead time.
• Low cost skilled labour
India has third lowest wage rate as compared to other key garment
manufacturing companies. This provides industry with a distinct
competitive advantage.
• Presence across value chain
Indian industry has manufacturing capacity present across complete
product range, that allows garment manufacturers to source raw
material locally and thus reduces the lead time.
• Growing domestic market
The Indian domestic market is extremely sensitive to fashion fads and
this has resulted in development of very responsive garment industry.
Weakness of Indian Garment
Industry
• Fragmented industry
Global buyers prefer to source their requirements from two to three vendors and
Indian garment manufacturers find it difficult to fulfill the capacity requirements.
• Effect of historical government policies
The industries continues to be affected by several historical regulations, for
instance there is still an absence of viable exit options for industry players. These
regulations resulted in complex industry structure, which is currently an obstacle. In
the Pre 2000 era garmenting sector was reserved for the Small scale Sector, which
has resulted in most units being set up with small capacities. Till now, knitted
garment sector is reserved for the small scale sector. Though the historical
regulations are relaxed now, they continue to be an impediment to global
competitiveness.
• Lower productivity & cost competitiveness
Lower cost competitiveness has hampered ability to compete with lower cost
global players because the labour force in India has a much lower productivity as
compared to competing countries like China, Sri Lanka.
• Technological obsolescence
A large portion of the industry’s processing capacity is obsolete. This has resulted in
low value addition in the industry and a need has risen for significant technology
investments to achieve world class quality.
Opportunity of Indian Garment
Industry
• Liberalizing economy
• Opening up of Indian economy has presented the players with lots of
opportunities; Indian companies are tying with global brands. They are
leveraging the brand name of global brands.
• Growing dual income
• With number of working women’s increasing the dual incomes are
income thus income available at peoples discrete has also increased.
• Rising Disposable Income
• Sizeable urban middle class
• As Indian incomes rise, the shape of the country’s income pyramid will
also change dramatically. Apart from a substantial reduction in poverty,
India will create a sizeable and largely urban middle class.
• Fifth largest consumer
India will become the world’s fifth largest consumer market by 2025. the
combination of rapidly rising household incomes and a robustly growing
population will lead to a striking increase in overall consumer spending.
Threats of Indian Garment
Industry
• Fluctuation in rupee value
The fluctuation in rupee value posses a big threat in front of importers and
exporters. The exchange value of Rupee against UD Dollar has depreciated to Rs
50.03 which has resulted in huge losses for the importers. Thus there is always a
great threat for players in international
trade. But since it affects only international players thus it is not as big a threat as
some of other threats.
• State of Recession in the economy
The apparel industry gets severely hit during recession because of less liquidity in
the market. This industry is an export-oriented industry which lies in doldrums
during this stage.
• Competition from global players
The major exporters of garments from all over the world are giving tough
competition to India as they are providing higher productivity with lower costs.
Competition is not likely to remain just in the exports space, the industry is likely to
face competition from cheaper imports as well. This is likely to effect the domestic
market and may lead to increased consolidation.
Ecological & Social Awareness is likely to result in increase pressure on the
industry to follow international labour and environmental laws.
Top Companies
• Pantaloon Retail India Ltd
• Shopper's Stop
• Globus stores Pvt Ltd
• Arvind Brands Ltd
• Provogue India Ltd
• The Raymond Group
• Madura Garment
• Reliance Retial Ltd
• Wills lifestyle
• Landmark Group
• Gokalda Group
• Zodiac Clothing
Some Major companies attributes
Garment Factory Structure
Merchandising Department
Trim & Accessory Store
Cutting Department
Sampling Department
Purchase Department
Fabric Store
Embroidery Department
Washing
Packaging
Finishing Department
CAD
Production Department
ACTIVITIES INVOLVED UNDER EACH
DEPARTMENT
Merchandising Department
• Communication with buyers in terms of sample development,
approvals, order confirmation
• Communication with internal departments and forwarding
required information to the respective departments
• Procure order & Order confirmation
• Product development, sample development and sample
approval
• Development of bit loom, print strike off, embroidery strike off
etc
• Style Costing
• Calculating consumption of raw materials (Bill of material)
• Price Quoting
• Lab dip & Approval
Merchandising Dept Contd.
• Sourcing and purchasing of raw materials,
• Approval of fabric, Trims and Accessories
• Fabric Testing and garment testing done from testing labs
• Factory Scheduling / Planning
• Order Follow up: all steps of production & Quality
• Follow up vendors for subcontracting jobs like printing, hand
embroidery and washing
• Ensure on Time Delivery
• Liaison with the customer during Design, Sourcing, Production &
Shipping
• Conduct pre-production (PP) meeting with other departments,
handover production file and samples to the production team.
• Attend buyer’s meeting
• Ensure Customer Satisfaction
Apparel Production Planning
• Job or Task Scheduling: Preparation of time and action calendar for
each order from order receiving to shipment. The job schedule contains
list of tasks to be processed for the styles. Against each tasks planner
mentions when to start a task and what is dead line for that task.
• Material Resource Planning (Inventory): Preparation of Material
requirement sheet according to sample product and buyer specification
sheet.
• Loading production: Planner defines which style to be loaded to the
production line and how much quantity to be loaded.
• Process selection & planning: Processes needed to complete an order
vary style to style. According to the order (customer) requirement PPC
department select processes for the orders. Sometime extra processes
are eliminated to reduce cost of production.
• Facility location: Where a company has multiple factories
(facilities) for production and factories are set for specific
product, planner need to identify which facility will be most
suitable for new orders. Sometimes there may be a capacity
shortage in a factory, in that case planner need to decide which
facility will selected for that orders.
• Estimating quantity and costs of production: Planner estimate
daily production (units) according to the styles work content.
With the estimated production figure, production runs and
manpower involvement planner also estimate production cost
per pieces.
• Capacity planning: PPC department plays a major role during
order booking. They decide (suggest) how much order they
should accept according to their production capacity. Allocating
of total capacity or deciding how much capacity to be used for
an order out of total factory capacity. Regularly updating
factories current capacity (production capacity).
• Line planning: Preparing detailed line planning with daily
production target for the production line. Most cases line
planning is made after discussing with production team and
Industrial engineers.
• Follow up and execution: Whatever plan is made is executed
by PPC department. PPC department keeps close look
whether everything is progressing according the plan. Chasing
other department heads on daily basis to keep plan on track.
They update order wise completed tasks on the Time & action
Calendar. When they found something is going to be late they
expedite and create an alarm about the delay.
Have a virtual Tour…
THANK YOU…

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Introduction to indian garment industry

  • 1. Introduction to Indian Garment Industry By ANKUR MAKHIJA –NITRA, Ghaziabad
  • 2. APPAREL INDUSTRY-an overview • The Indian textiles industry plays an important role in the country’s economic growth • It contributes around 14% to industrial production, 4% to GDP and 17% to the country’s export earnings • One of the key trends seen in the liberalised post-quota period is that India emerged a major sourcing destination for new players. • The industry’s size is estimated at US$ 55 bn with 64% companies catering to domestic demand. The textiles industry provides direct employment to more than 35 mn people and indirect employment to 47 mn.
  • 3. Apparel clusters in India • The apparel industry is concentrated mainly in eight clusters: • Tirupur, • Ludhiana • Bengaluru • Delhi/Noida/Gurgao • Mumbai • Kolkata • Jaipur • Indore. While Tirupur, Ludhiana and Kolkata are major centres for knitwear, Bengaluru, Delhi/Noida/Gurgaon, Mumbai, Jaipur and Indore are major hubs for woven garments.
  • 4. Export Scenario • India’s share in global T&C trade: 4% in textiles and 2.8% in clothing • India’s rank in world trade: 7th in textiles and 6th in clothing • Share in the country’s total exports basket: 12% • Readymade garments share: nearly 50% of total textile exports • India’s textiles products are exported to over 100 countries • Two-third of India’s textiles are exported to the US and EU • Other major export destinations include Canada, UAE, Japan, Saudi Arabia, Republic of Korea, Bangladesh and Turkey.
  • 6. SWOT ANALYSIS OF INDIAN GARMENT INDUSTRY
  • 7. Strength of Indian Garment Industry • Abundant raw material availability India is one of the leading producers of natural and man made fibers. The abundance of raw material allows industry to control cost and reduce over all lead time. • Low cost skilled labour India has third lowest wage rate as compared to other key garment manufacturing companies. This provides industry with a distinct competitive advantage. • Presence across value chain Indian industry has manufacturing capacity present across complete product range, that allows garment manufacturers to source raw material locally and thus reduces the lead time. • Growing domestic market The Indian domestic market is extremely sensitive to fashion fads and this has resulted in development of very responsive garment industry.
  • 8. Weakness of Indian Garment Industry • Fragmented industry Global buyers prefer to source their requirements from two to three vendors and Indian garment manufacturers find it difficult to fulfill the capacity requirements. • Effect of historical government policies The industries continues to be affected by several historical regulations, for instance there is still an absence of viable exit options for industry players. These regulations resulted in complex industry structure, which is currently an obstacle. In the Pre 2000 era garmenting sector was reserved for the Small scale Sector, which has resulted in most units being set up with small capacities. Till now, knitted garment sector is reserved for the small scale sector. Though the historical regulations are relaxed now, they continue to be an impediment to global competitiveness. • Lower productivity & cost competitiveness Lower cost competitiveness has hampered ability to compete with lower cost global players because the labour force in India has a much lower productivity as compared to competing countries like China, Sri Lanka. • Technological obsolescence A large portion of the industry’s processing capacity is obsolete. This has resulted in low value addition in the industry and a need has risen for significant technology investments to achieve world class quality.
  • 9. Opportunity of Indian Garment Industry • Liberalizing economy • Opening up of Indian economy has presented the players with lots of opportunities; Indian companies are tying with global brands. They are leveraging the brand name of global brands. • Growing dual income • With number of working women’s increasing the dual incomes are income thus income available at peoples discrete has also increased. • Rising Disposable Income • Sizeable urban middle class • As Indian incomes rise, the shape of the country’s income pyramid will also change dramatically. Apart from a substantial reduction in poverty, India will create a sizeable and largely urban middle class. • Fifth largest consumer India will become the world’s fifth largest consumer market by 2025. the combination of rapidly rising household incomes and a robustly growing population will lead to a striking increase in overall consumer spending.
  • 10. Threats of Indian Garment Industry • Fluctuation in rupee value The fluctuation in rupee value posses a big threat in front of importers and exporters. The exchange value of Rupee against UD Dollar has depreciated to Rs 50.03 which has resulted in huge losses for the importers. Thus there is always a great threat for players in international trade. But since it affects only international players thus it is not as big a threat as some of other threats. • State of Recession in the economy The apparel industry gets severely hit during recession because of less liquidity in the market. This industry is an export-oriented industry which lies in doldrums during this stage. • Competition from global players The major exporters of garments from all over the world are giving tough competition to India as they are providing higher productivity with lower costs. Competition is not likely to remain just in the exports space, the industry is likely to face competition from cheaper imports as well. This is likely to effect the domestic market and may lead to increased consolidation. Ecological & Social Awareness is likely to result in increase pressure on the industry to follow international labour and environmental laws.
  • 11. Top Companies • Pantaloon Retail India Ltd • Shopper's Stop • Globus stores Pvt Ltd • Arvind Brands Ltd • Provogue India Ltd • The Raymond Group • Madura Garment • Reliance Retial Ltd • Wills lifestyle • Landmark Group • Gokalda Group • Zodiac Clothing
  • 12. Some Major companies attributes
  • 13. Garment Factory Structure Merchandising Department Trim & Accessory Store Cutting Department Sampling Department Purchase Department Fabric Store
  • 15. ACTIVITIES INVOLVED UNDER EACH DEPARTMENT
  • 16. Merchandising Department • Communication with buyers in terms of sample development, approvals, order confirmation • Communication with internal departments and forwarding required information to the respective departments • Procure order & Order confirmation • Product development, sample development and sample approval • Development of bit loom, print strike off, embroidery strike off etc • Style Costing • Calculating consumption of raw materials (Bill of material) • Price Quoting • Lab dip & Approval
  • 17. Merchandising Dept Contd. • Sourcing and purchasing of raw materials, • Approval of fabric, Trims and Accessories • Fabric Testing and garment testing done from testing labs • Factory Scheduling / Planning • Order Follow up: all steps of production & Quality • Follow up vendors for subcontracting jobs like printing, hand embroidery and washing • Ensure on Time Delivery • Liaison with the customer during Design, Sourcing, Production & Shipping • Conduct pre-production (PP) meeting with other departments, handover production file and samples to the production team. • Attend buyer’s meeting • Ensure Customer Satisfaction
  • 18. Apparel Production Planning • Job or Task Scheduling: Preparation of time and action calendar for each order from order receiving to shipment. The job schedule contains list of tasks to be processed for the styles. Against each tasks planner mentions when to start a task and what is dead line for that task. • Material Resource Planning (Inventory): Preparation of Material requirement sheet according to sample product and buyer specification sheet. • Loading production: Planner defines which style to be loaded to the production line and how much quantity to be loaded. • Process selection & planning: Processes needed to complete an order vary style to style. According to the order (customer) requirement PPC department select processes for the orders. Sometime extra processes are eliminated to reduce cost of production.
  • 19. • Facility location: Where a company has multiple factories (facilities) for production and factories are set for specific product, planner need to identify which facility will be most suitable for new orders. Sometimes there may be a capacity shortage in a factory, in that case planner need to decide which facility will selected for that orders. • Estimating quantity and costs of production: Planner estimate daily production (units) according to the styles work content. With the estimated production figure, production runs and manpower involvement planner also estimate production cost per pieces. • Capacity planning: PPC department plays a major role during order booking. They decide (suggest) how much order they should accept according to their production capacity. Allocating of total capacity or deciding how much capacity to be used for an order out of total factory capacity. Regularly updating factories current capacity (production capacity).
  • 20. • Line planning: Preparing detailed line planning with daily production target for the production line. Most cases line planning is made after discussing with production team and Industrial engineers. • Follow up and execution: Whatever plan is made is executed by PPC department. PPC department keeps close look whether everything is progressing according the plan. Chasing other department heads on daily basis to keep plan on track. They update order wise completed tasks on the Time & action Calendar. When they found something is going to be late they expedite and create an alarm about the delay.
  • 21. Have a virtual Tour…